Tugboat formed in 1999, around the core of James, Jeremy (formerly of the Killjoys) and Bek (who currently also plays in Heligoland).
During 1999 they recorded their first single for fledgling indie label Library, which upon its release in mid 2000 went on to sell several hundred copies, predominantly overseas, quite a feat for a band with no pedigree and little airplay.

The relative success of the single led to the recording of the band's debut album, recorded over a nine-month period with Richard Andrew (Underground Lovers, Registered Nurse, Black Cab) in the producer's seat. Released in September 2001, "All Day" was met with several excellent reviews (ozmusicproject, mono, three stars on allmusic, and a very lengthy analysis in web fanzine 'the war against silence') and modest but encouraging sales both in Australia and overseas. 2002 was a big year for Tugboat shows, including an east coast tour with with the Lucksmiths, and shows with international touring bands the Salteens (from Canada) and Boyracer (UK/US).
2003 was a quiet year for the band, predominantly spent writing and preparing for the second album, the recording of which commenced in July 2003. The second album was recorded with Simon Knight (who has also recorded releases by The Pictures, My Disco!, The Crayon Fields and Sleepy Township) over a period of twelve months. The mixing of the album was shared between Simon and Richard Andrew, the latter adding further percussion and instrumental arrangements to the album.

The second album, "Two Schools of Thought", was released in October 2005.